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Chapter 19: Q.a - For Critical Thinking (page 418)

Why does it make sense that there was a negative percentage change in the quantity of cable TV subscriptions demanded in response to an increase in the price of these subscriptions?

Short Answer

Expert verified

The coefficient of value versatility of interest is generally a negative number on account of the inverse connection between cost and the amount demanded.

Step by step solution

01

Given Information

Value flexibility or versatility of value alludes to the rate change popular for an item concerning the rate change in any of the elements influencing interest for that ware.

02

Explanation

With an expansion in the cost of T.V. membership, the interest for the amount of link T.V. will diminish. This is because of the way that, individuals in light of expansion in cost will generally buy less link T.V. membership. It is expected that shoppers are objective in nature and they need to fulfil their needs with a given spending plan imperative.

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Most popular questions from this chapter

Based solely on the information provided below, characterize the demands for the following goods as being more elastic or more inelastic.

a. A 45-cent box of salt that you buy once a year

b. A type of high-powered ski boat that you can rent from any one of a number of rental agencies

c. A specific brand of bottled water

d. Automobile insurance in a state that requires autos to be insured but has only a few insurance companies

e. A 75-cent guitar pick for the lead guitarist of a major rock band

Classify supply elasticities and explain how the length of time for adjustment affects the price elasticity of supply

A 5percent increase in the price of digital apps reduces the amount of tablet devices demanded by 3percent. What is the cross price elasticity of demand? Are tablet devices and digital apps complements or substitutes ?

In a local market, the monthly price of Internet access service decreases from \(20per account to \)10per account, and the total quantity of monthly accounts across all Internet access providers increases from 100,000to 100,000 . What is the price elasticity of demand? Is demand elastic, unitelastic, or inelastic?

An increase in the market price of men's haircuts, from \(15per haircut to \)25per haircut, initially causes a local barbershop to have its employees work overtime to increase the number of daily haircuts provided from 35to45. When the $25 market price remains unchanged for several weeks and all other things remain equal as well, the barbershop hires additional employees and provides 65 haircuts per day. What is the short-run price elasticity of supply? What is the long-run price elasticity of supply?
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